Help, our HOA is Monitoring Our Every Move!?!

Dave

In 2017 we moved into a very nice neighborhood, as I was transferred from Wyoming.  After moving in, we found that the homeowners association was operating and “very active” in the neighborhood.  They are monitoring every move we make and I received a terse letter pointing out a couple of violations that if not addressed within three weeks would result in a daily fine.  We were aware that there was a homeowners association when we purchased the home but were not aware that they would monitor our every move.  We never received a copy of the Covenants prior to our purchase, however, the homeowners association provided a copy after we moved in. We are not happy with all the restrictions in the neighborhood and are feeling very frustrated as this is not, at all, similar to our old neighborhood in Wyoming.  Any advice would be helpful.

Thanks,

Mark & Monica

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Mark & Monica,

Unfortunately, this sounds all too familiar, especially for people who are moving from a more rural area or an area that does not have an abundance of homeowners associations.   An HOA is designed by the developer to ensure the long term value and “appeal” of the neighborhood.  In order to maintain a consistent product, there have to be rules in place that guide builders of how to build, which is typically done in the architectural controls of a neighborhood and the covenants spell out what is and is not allowed within the neighborhood after the home is built and the new owners have moved in.  The covenants are there to protect your value and ensure the “look” of your neighborhood and generally are considered a good thing.  As with all things, people can take things too far and this is generally where the trouble begins. 

There is no doubt you should have received copies of all the covenants, architectural controls, minutes of the HOA meetings for the past year, annual budget, income and balance sheets for the HOA during the contract phase of your purchase.  These disclosures are a part of Colorado's real estate contracts.  During the contract phase, you should have also been instructed to read them and at The Kimbrough Team, we always get written acceptance of such documents.   You might look through your records, if you have not already done so, and make sure you did not receive them.  The covenants and architectural control are typically included with the Title Work you get from the title company during your transaction.

At this juncture, I do not believe you have many options other than to comply.  It is common that fines are levied if problems are not resolved in a timely fashion, as it would prove difficult to get compliance without some amount of monetary fine.  If you moved from a neighborhood without or limited covenant restrictions then I can see where you could be suffering from “culture shock” and unhappy with your current situation.  Remember, if the covenants were not in place it would open the door to a free for all and could potentially allow, trash, old debris to remain on the property and drive the values and the curb appeal of your neighborhood down. 

I would recommend trying to find some middle ground with the HOA and work it out.  A common theme with this column is communication. Communicate, respectfully, with the HOA and I bet you will find they are open to working with you.  Most HOA’s are there to preserve the value, not with the intent to make your life difficult.  Best of luck!

Dave Kimbrough

The Kimbrough Team

Common Home Buying Questions Answered!

Dave,

I’m going to start looking at purchasing a home this fall and I have a few questions about the process. About how long does the home buying process last for most of your clients? I know you’ve worked with a lot of people and will have a pretty good idea of what the average time frame looks like. I’m planning several trips this fall and winter and want to make sure I’m settled into my new home before leaving. Also, about how many houses should I look at before making an offer on one I like? Is there a good number to use as a gage? If I find a home that checks off most items on my list, should I continue looking to make sure it is the best option or just put in an offer? I’ve heard you should go with your gut, but I’m not sure if that’s the best advice.

Thanks for your guidance!

Jeff, Fruita

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Jeff, 

All great questions. The home buying process can be overwhelming if you let it, but you are starting the process by asking some great questions and clearly will be entering the fray with a laid out plan! Keep in mind that you are entering the housing market at a time that is moving quite briskly. When you are shopping for a new home in a hot market you have to throw some caution to the wind or you will constantly find yourself on the outside looking in and missing out on home after home. 

The length of time the home buying process takes depends on each individual. Everybody learns at a different pace and everyone evaluates homes and the market just as differently. It’s funny, sometimes we see a husband who is very cautious and a wife that is eager to pull the trigger! Their yen and yang is probably why they work great as a couple, but the same yen and yang can prove very difficult during the home buying process if they are not working synergistically. I would recommend you don’t put a time limit on yourself, but do make sure to spend enough time to get educated about the market and the houses in, above and below your targeted price point. This may take one day for some or 30 days for others. It purely depends on the person. 

The number of houses you look at is also individually subjective, but you need to see enough houses in and surrounding your targeted price point to make sure you can identify a good (or bad) deal when you see one! Your agent should be able to help you identify what is a good deal and what’s not, but you want to make sure you have a good feel for that on your own. 

Once you feel like you have a good feel for the market and start looking in earnest don’t be afraid to jump if you find the right one quickly! Listen, if my wife had not jumped when she did, I am confident I would have been swooped up by another looker shortly thereafter! All kidding aside, the good ones go fast (and that’s what I keep telling her) and if you wait, someone will swoop in and snag it! If you have educated yourself properly about the market then this is where you should trust your gut. Trusting your gut is easier to do, with confidence, when you have spent the time educating yourself about what you are doing.

“If you find a house that checks off most, but not all of the items on your list, don’t just overlook it and pass it by because it may very well be the one.”

Remember house hunting is full of trade-off’s. You will NEVER find the perfect house. Show me someone who is looking for the “perfect” house and I will show you someone who is wasting their (and their Realtor's) time and will likely end up very frustrated. If you find a house that checks off most, but not all of the items on your list, don’t just overlook it and pass it by because it may very well be the one. I believe when you see the one, you will know (or at least have a good idea) it’s the one! When I found my personal house it was a disaster, but I knew it was the one! It had many, many flaws, but they paled in comparison to its strengths and I could see the end result even back then. 

Bottom line, when you shop for your new home, be aggressive. Being passive won’t get it done if the house is new to the market. Sometimes it does take time, but don’t be afraid of fast because sometimes fast is the most fun and packs the biggest reward. You are going to do great and I have no doubt you will find the perfect house.

Dave Kimbrough
The Kimbrough Team

Have a Question? Ask Dave!

When can buyers take possession of a house after closing?

Dave,

I recently sold my home and before and during the closing the buyer stated they would give me a few extra days to even a week to move out after closing. The day after closing they showed up looking to move-in and informed me a locksmith would be showing up at 4:00pm to change the lock. Needless to say I was still packing the small stuff and the new owners stood in the living room hovering over me the entire time.

I called my Realtor and was told that technically I had until 11:59 pm if I wanted. My Realtor then called theirs and told them to leave but they just went outside and hung out there. I do have to mention that I let them come over a few times so they could measure for windows and things during the process and I feel like I accommodated them. I feel like they should have done the same and let me finish packing, which was done by 6pm.

What are your thoughts about this?

Chris K., Grand Junction         

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Chris,

I am sorry to hear about your experience, but I can assure you that you are not the only seller who has suffered the fate of the helicopter buyer trying to take possession of their new home after closing! It can be SUPER stressful and no fun for all parties involved.

I am confident you can chalk this one up to the often overlooked, possession date and time of possession portion of the contract to buy and sell real estate. Just for kicks let’s just add in a little poor communication for good measure. Seems like most things that go wrong have a smidge of poor communication sprinkled in, so we will just make the assumption that this situation was no different. It is my experience, and I have been guilty of doing it myself, that everyone has such a keen eye on the closing date that the possession date and time of possession fall out of focus and are left with little attention until they create a problem. 

Every contract has a specific field for closing date, possession date AND time of possession. In your case it sounds like you had possession until 11:59 pm of the day of closing (either written in the time of possession portion of the contract or that section was left blank). The unfortunate part of this situation is the above referenced “smidge of poor communication” or lack of buyer understanding about when they could take possession. Most Colorado contracts that I deal with have the possession time read “at closing”, meaning that when you close the house and the money has arrived then the buyer is the new owner and takes possession at that time. If that field is left blank and no time is designated, then it defaults to 11:59 pm (per the portion of the contract that specifically references the definition of “a day”) the day of close.  This appears to be similar to the circumstances surrounding your contract. 

“It is my guess the buyer did not realize when they were contractually able to take possession and assumed that it would be at close OR they were not informed that you had until 11:59 pm on the day of close to get out, before they were to take possession.”

It is my guess the buyer did not realize when they were contractually able to take possession and assumed that it would be at close OR they were not informed that you had until 11:59 pm on the day of close to get out, before they were to take possession. Either way, the circumstances were not ideal and uncomfortable.

I will also note that it is VERY typical for a buyer to want to come back to the home they are purchasing and measure for window blinds, refrigerators, televisions, beds etc. They would likely not see this as you “accommodating” them, but that they were just making preparations for purchasing your home and gathering needed information. I am sure they did not view it as putting you out in any way.

You are right, it would have been great for them to just leave and come back at a later time, but they may have not had anywhere to really go. This is one of those times to just handle the situation with class and an opportunity to show some grace! Most of the time the stress of the situation and the lack of communication tend to make these issues larger than they really are. I totally get your frustration, but it’s a great opportunity to look at it from another perspective and consider what could be done differently next time in order to prevent the same thing from occurring again! On the bright side, you did give them possession 6 hours early!  : )

Dave Kimbrough
The Kimbrough Team

HAVE A QUESTION? ASK DAVE!

Will Solar Panels Increase My Home Value?

Dave,

A salesman knocked on my door last week selling solar panels. He said if I did a lease to own on the panels, I would cut my energy bill and be able to use some of the savings each month to pay for the panels. Cut my energy bill, pay for the panels with what I save, and still have some savings left—it sounds like a great deal. I’m considering giving him a call back to discuss how to move forward, but wanted to get some outside advice first.

On top of the savings he mentioned that when I went to sell my house, the value would increase dramatically…up to $50,000 possible on my house. It all sounds almost too good to be true! I am sure you have run across all this before.

Thanks for all the advice!

Doug, Grand Junction

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Doug,

Like I discuss with my kids all the time, if it sounds too good to be true, it most likely is! We could probably stop this answer here and cover the bases for 90% of home owners, but that would not be doing Paul Harvey any justice. We need to provide “the rest of the story”. I will preface this answer with full disclosure that I am not a solar expert. My answer is based on the stories I have been exposed to and the first hand experiences of our clients. There are MANY angles that need to be examined to determine if going solar is right for you.

I also realize that my answer does not take into account the sales person’s pitch about a meteoric rise in electricity costs that is coming. Listen, if the cost of electricity sky rockets, then my answer here is wrong! If you believe the cost of electricity will skyrocket and you are going to live in your home for MANY years to come, then purchasing solar panels makes all the sense in the world and you should stop reading now! If you’re still reading then you better think long and hard before taking the solar plunge. For most solar panel owners, it is more about the statement made by having them than the fiscal savings they actually provide. YES, solar energy is good for the environment and I don’t think there are many who would debate that. I don’t think there is any doubt that there is the need to focus and continue to develop renewable energy sources that reduce our carbon footprint, but specifically with solar, the real monetary benefits are likely to be years down the road.  

If you purchase a solar system for your home, there is no doubt you will reduce or eliminate your electricity bills, but at what cost? Obviously you will still have a natural gas or propane bill, thus seeing bigger savings in the summer and less in the winter. Let’s just hypothesize that you spend $25,000 (after any rebate or incentives) to put in your solar system. Let’s also say that your electricity bill is $150 per month or $1800 per year (remember you still will have a gas bill). It will take you 14 years to break even with the cost of the system. Not bad, but 14 years is a long time! According to Zillow the average family moves every 7 years! Uh oh, that math does not work. Looks like the true benefactor will be the home owner that’s two home owners down the line! Oh yeah, what about your property value increase? From my experience, to date, there is not a significant increase in home value of a home in our market with solar panels vs. one without. Maybe that changes in the future, but right now it is a selling feature, not a significant value add.

“Not so fast my friend! Back to the first line of this article, if it sounds too good to be true, it likely is. ”

Ok, so let’s not purchase the panels, let’s lease them…same great savings, but you don’t have to pay for them up front! Right? Not so fast my friend! Back to the first line of this article, if it sounds too good to be true, it likely is. I have yet to encounter a solar leaser that left me saying, “now that’s a good deal” and I have seen many. Each and every lease has its angle, but ultimately, if you look into them you will encounter red tape and potentially unattractive answers. How easy will it transfer to a new owner? What happens if you want to remove them? What is the early prepayment penalty? What happens to them at the end of the lease? The list goes on and on and the answers are not always easy or cut and dry. Not to mention that when you go to sell you have to find a buyer who not only loves your home, but also loves your solar lease! Harder to do than you think…trust me.

Lastly, if your home was not built to energy star rating standards there are MANY things you can and should do to increase your home’s energy efficiency before you take the solar plunge. There are a lot of things to consider and it is a very personal choice. Best of luck and hope this helps…

Dave Kimbrough
The Kimbrough Team

Buying a home with pet & smoke odors? Here's how to get rid of them!

Dear Dave,

After months of house hunting, we have found one that is within our budget and which perfectly suits our needs. The problem is house odors. The sellers are an older couple who both smoke and who have a dog and two cats that stay indoors most of the time. We have mentioned our concern to the sellers, but they don't share our concern. We assume that by replacing all the carpets and completely repainting, we could eliminate the odors. If so, we would make an offer that covered those expenses. Two questions: first, do you have any experience resolving odor problems and second, how could we include these expenses in our mortgage so that the cost will be incurred after the closing?

Julie, Location Withheld

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Julie,

It is exciting that you finally found the perfect house, but with less than perfect odors I am sure you are feeling a bit disappointed!  I will admit that odors, especially smoke and pet, are powerful value killers and there is little that zaps the value right out of a property more than if a cat or dog have been acting as though the carpet was indoor grass or the home smells like an ashtray. The purchase of a new home very much involves the senses and if the odor is offensive, it is an immediate turn off, but often times the people who live there have no idea how bad it really is.

The seller does not share your concern because, one, they are no longer going to live there and it really won’t be their problem once the new buyer moves in. Two, they do not have the funds to correct the problem and thus they deny there is a problem because they financially can’t admit to it or afford to correct it. Three, they really do not care if they sell or not, thus only taking an offer from someone who is willing to either fix the problem on their dime or learn to live with the odor! Most of these are not options that buyers want to hear, but at times they are the reality. Fortunately there are a couple of options.

“If you are dealing with primarily smoke odors (as they do not work well on pet odors), an ozonator air purifier may work.”

First, the option of replacing all the carpet and having the interior completely repainted will typically do the trick, depending on how bad the odors are. You must also consider if the pet odors are significant, you may have to paint the floors with Kilz or some kind of seal coat to cover up or seal any pet stains that have soaked into the sub floor underneath the carpet and pad, yikes!! It sounds worse than it is, but remember this may need to be done. If you are dealing with primarily smoke odors (as they do not work well on pet odors), an ozonator air purifier may work. I have seen it do wonders with odors caused by smoking. Good Shepard Flooring here in Grand Junction have these units available for rent and are very cost effective. Generally speaking, ozone ionizers work at a molecular level and can remove smoke odors from homes, cars, boats etc...I will admit that I am no molecular scientist and thus have no “real” working knowledge of how they work, but I know from experience they can do an amazing job at removing smoke smells from a home or car. You MUST remove all living organisms, i.e. people, cats, dogs, fish, plant etc..(anything you want to remain alive), while the unit is in use and then you can all return home after the treatment and the home has been opened back up. I would highly recommend a professional be hired to help with their use, don’t just get the wise idea to go buy one off the internet.

Lastly you can do what is called a 203K loan which would allow you to escrow the funds for the needed repairs after closing. These loans can be more difficult to manage, so finding a lender who has experience with them will make things run much smoother during the purchase process and after close you will have the funds to make the needed repairs to the property. Keep in mind that the repair costs can’t push the loan value needed over the appraised value. Ask your lending professional if they have experience working with 203k loans and their success rate. This can be a very viable option for repairs needed, even if the repairs or changes are just for taste and by this I mean, the carpet does not have to be stained to qualify for a 203K loan, you may just want a different color.

I hope these suggestions help and I am hopeful that you will find a solution.  

Dave Kimbrough
The Kimbrough Team

Dave's advice on budgeting and home ownership

Dear Dave,

It seems like everywhere I turn these days there is someone talking about Dave Ramsey and his budget plans. It has really got me thinking about budgeting and has prompted me to look into some different apps and plans to do this effectively.

This past year we purchased a home and I really want to make sound decisions as I move into my 30’s and budget and invest wisely.

Do you have any great advice for me in terms of budgeting and home ownership? I value your opinion and look forward to reading your advice every week!

Thanks,
Alex - Grand Junction, CO

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Alex,

Great question and it is awesome that you are looking to be fiscally responsible as you move into what are your prime income earning years - your 30’s and 40’s.  Dave Ramsey, in my mind, without question is on the forefront of fiscal responsibility with his programs, talk show and website. You can find an incredible amount of financial advice at daveramsey.com and there you will find his "7 Baby Steps to Taking Control of Your Money!" Let me add, purchasing a home is a wonderful way to start creating wealth.

Several of the “Baby Steps” listed on the Dave Ramsey website make a ton of sense, regardless of your age. First, is to save $1,000 for an emergency fund. You never know what curveballs life is going to throw, but there is little doubt there will be some coming your way. Having an emergency fund, for a bump in the road, is a wonderful idea and you will be prepared for that broken arm, car repair or trip to visit a sick family member. As any experienced home owner will tell you, there are many things that can pop up at the most unexpected times - like a hot water heater, furnace, swamp cooler, roof repairs, fallen tree and much more.   This emergency fund can also relieve quite a bit of stress, just knowing that you have something to fall back on, if necessary. After you have saved your emergency fund, it is a great idea to save and have at least 3-6 months of expenses in savings. This will allow you to weather the more significant problems that come up in life…the birth of a child, loss of a job or a major health related issue. Having 3-6 months built up can offer you the mental freedom of knowing you have taken steps to protect you, your family and your future from a potential disaster.

“It is a great idea to pay off all debt, except your home. Your home is generally financed at a low interest rate and the interest each year is tax deductible.”

It is a great idea to pay off all debt, except your home. Your home is generally financed at a low interest rate and the interest each year is tax deductible. Non-mortgage debt is generally high interest debt and paying it down is critical to gaining financial freedom. Getting rid of credit card debt is key. According to nerdwallet.com, the average American household (of households who have credit card debt) currently carry over $16,000 in credit card debt and the high interest rates on that debt makes it very hard to pay off. Remember, before you purchase something with your credit card, ask yourself “how bad do I really need this and can I pay it off in the next 30 days?” When I got my first credit card, my parents advised me to ask these questions and it has been very beneficial to me. Even today, I still ask myself those questions before pulling the trigger on the newest video game or tennis shoes. The answers to those two questions will probably lead to less spending and also the accumulation of less stuff. If you are spending less, you should now be able to begin saving more for retirement.

Your home is now a big part of your wealth building and financial portfolio. Make sure to treat it as such. Keep up with maintenance and updating to help protect your investment. Remember to celebrate your successes and let them build on one another until you become a saving machine! I have no doubt you have a very bright future.

Dave Kimbrough
The Kimbrough Team